EON sees profit of up to €1 bn after Uniper split

Bloomberg

EON SE is targeting underlying net income of as much as €1 billion this year after Germany’s biggest utility spins off its Uniper unit to focus on renewables, networks and customer services.
The Essen-based company will be a “strong dividend performer,” and plans to pay shareholders up to 60 percent of net income a year, CEO Johannes Teyssen said on a call with reporters before its capital markets day in London.
EON is to list 53% of Uniper, pending approval at a shareholder meeting on June 8.
The utility’s decision to separate its fossil-fuel plants and trading into Uniper is one of the most radical responses yet to Germany’s shift toward wind and solar generation, a policy that’s undermining power prices and hurting profitability at traditional utilities.
EON’s share price has dropped 37 percent since it announced the spinoff in November 2014 and was the second-worst performer in Germany’s DAX index last year. It’s up about 3 percent this year.
“After the spinoff, our business will depend to a much lesser degree on outside factors that are beyond our control, such as volatile commodity prices,” CEO Teyssen said. EON is active in the “markets of the future. These markets are growing and offer the prospect of stable returns.”
EON expects earnings before interest and tax of €2.7 billion to €3.1 billion for the new EON, and to be stable for the “next few years,” it said on Tuesday.

Unique Performer
Uniper, which stands for unique performance, will focus on conventional and hydropower generation, energy trading and the exploration and production business.
Uniper will take on €4.7 billion of net debt, which it plans to reduce by divesting at least 2 billion euros of assets, Christopher Delbrueck, the company’s CFO, said on a separate call with reporters. Uniper’s adjusted Ebitda fell 15 percent to €1.7 billion last year from 2014.
“Uniper’s upfront financials look somewhat stronger than we anticipated, allowing it to bear a bit more debt,” Sofia Savvantidou, the head of utilities research at Exane BNP Paribas, said in an e-mailed note.